Chapter 4

Question 1

The precursor of all fire insurance forms.

Answer 1

New York Standard Fire Policy (1943)

Question 2

What were the three covered perils under the standard fire policy?

Answer 2

Fire, lightning, and removal

Question 3

When was coverage effective under the standard fire policy?

Answer 3

Noon Standard Sign

Question 4

What do dwelling fire policies cover?

Answer 4

Dwelling and personal property. (No liability)

Question 5

Do dwelling fire policies require the property to be owner-occupied?

Answer 5

No

Question 6

What are the 3 forms offered in the Dwelling ‘02 program?

Answer 6

1) Dwelling Property Basic Form (DP-00-01 aka DP1
2) Dwelling Property Broad Form (DO-00-02 aka DP2)
3) Dwelling Property Special Form (DP-00-03 aka DP3)

Question 7

Which properties are not eligible for DP policies?

Answer 7

Farms
Structures with more than 4 units
Any structure used for a commercial or business purpose

Question 8

What are the four coverages offered under a DP policy?

Answer 8

A dwelling
B other structures
C personal property
D rental value 
*** E additional living expenses is included in DP2 and DP3. Can be added to DP1 by endorsement.

Question 9

Are the four coverage parts in a DP policy included in a policy!

Answer 9

No. The insured may pick which coverages he or she desires.

Question 10

Which peril form is used in a DP1 policy?

Answer 10

Specified peril. (Fire, lightning, internal explosion)

Question 11

What does Coverage A cover on a DP1?

Answer 11

Dwelling principally used for residential purposes. Includes structures attached to the dwelling.

materials and supplies on or next to the location which are used to construct, alter, or repair the dwelling or other structures.

Anything used for servicing or maintenance of the described premises. (Lawn mower, range, fridge, storm doors, shutters, awnings)

Question 12

What does coverage B cover on a DP1 policy?

Answer 12

Loss to (appurtenant) structures set apart from the dwelling by a clear space. (Detached garage, pools, cabanas)

Structures connects by only a fence, utility line, etc.

Question 13

What is excluded on Coverage B of a DP1 policy?

Answer 13

Other structures used in whole or by part for commercial, manufacturing or farming purposes, or rented or held for rental to any person not a tenant of the dwelling, unless used solely as a private garage.

Land

Damage to grave markers or mausoleums.

Question 14

What is the maximum coverage that can be purchased for Coverage B on a DP1 policy?

Answer 14

10% of coverage A.

Question 15

What does Coverage C of a DP1 policy cover?

Answer 15

Personal property owned or used by a named insured or resident family member while on the Insureds premises. Only covered when premium is paid for this coverage.

10% of contents limit for property away from premises.

Question 16

What coverage is excluded under Coverage C of a DP1 policy?

Answer 16

Bills, currency, deeds, evidence of debt, credit cards, coins, bullion, gold, grave markers, manuscripts, money, passports, securities, silver, tickets, stamps, animals, birds, fish, aircraft, motor vehicles (except for those used to service property), watercraft (rowboats an canoes ARE covered), electronic data and discs, and credit card card or fund transfer cards

Question 17

When an insured has a DP1 and moves to a new residence, how long does coverage c extend?

Answer 17

At least 30 days after the insured begins to move property there. (Does not extend beyond policy termination date)

Question 18

What is covered by coverage D on a DP1?

Answer 18

FRV (fair rental value) minus expenses that do not continue (condo fee) when Property rented (held for rental) is uninhabitable.

Question 19

What is the maximum coverage available under Coverage D on a DP1 policy?

Answer 19

20% of coverage A. Sometimes more can be purchased.

Question 20

What coverages does a DP1 offer, outside of parts A-E?

Answer 20

Debris removal (in addition to limit A)

Improvements, alterations, additions. (If a tenant) 10% of C (contents) does not reduce limits on C

World- Wide coverage 10% of c. DOES reduce limit.

Reasonable repairs (to prevent further damage)

Property removed is covered for ANY CAUSE OF LOSS at any location due to a covered peril up to 5 days. Doesn’t reduce limit of liability that applies. Also covers property in transit

Fire department service charges. Up to $500 for a NEIGHBORING FD to respond. Doesn’t cover hometown.

Question 21

Which perils are covered by a DP1?

Answer 21

Fire
Lightning,
Internal (inside house) explosion(except bursting pipes, electrical arcing, explsions of steam boilers/pipes, rupture of pressure relief devices); other perils - extended coverages EC and vandalism can be added.

Question 22

What are the 8 extended coverage perils covered by a DP1?

Answer 22

Hail or windstorm, aircraft, riot, vehicle damage (others’ vehicle damaging your property), volcanic eruption, smoke, explosion (VWSHAVER)

Question 23

The insured purchased EC under a DP1 policy. Is smoke caused by a fire burning in the fireplace covered?

Answer 23

No. It must be due to a hostile fire.

Question 24

What does vandalism and malicious mischief cover?

Answer 24

Willful and malicious damage to or destruction of covered property. Does not cover glass breakage or loss by theft. The property can’t be vacant note than 60 days. A dwelling under construction is considered vacant.

Question 25

Which perils are not covered by a DP1 policy?

Answer 25

Earth movement, neglect,flood, sewer, or drain backup, sump overflow, war or nuclear hazards, theft, intentional destruction by the insured, damage from bursting pipes, loss due to ordinance and law, damage due to latent defect, rust, inherent vice, wear and tear or dry rot, or damage caused by insects, birds, or rodents.

Question 26

What kind of property is not covered by a DP1?

Answer 26

Motor vehicles (snowmobiles, atvs, golf carts) Aircraft Watercraft Animals, birds, fish Money Trees shrubs plants Fence Patio Pool Pavement (caused by weight of ice, snow sleet - wind-driven, or not)

Question 27

How are property losses under a DP1 settled?

Answer 27

ACV

Question 28

What are the broad form perils? DP-02

Answer 28

``` BIGAFFECT B-Burglary Damage I-Ice and snow wenight G-Glass breakage A-Accidental discharge or overflow of water or steam F-Falling objects F-Freezing of pipes E-Electrical damage C-Collapse T-Tearing apart, cracking, burning or bulging ```

Question 29

Which perils are covered by a DP-2 Form?

Answer 29

1)Fire 2) Lightning 3) V&MM 4) (EC) Coverages: Windstorm (exclusions: awnings, signs, anttenas, rowboats, canoes) Civil Commotion Smoke (except agricultural smudging, industrial operation) 2002 form damage caused by puffback was included Hail Aircraft Vehicles Volcanic Eruption (one reruption = 72 hours ... earthquake isn't covered) Explosion Riot 5) Burglary Damage 6) Weight of Ice Snow or Sleet (except: awnings, fences, patios, pavement, pools, foundations, retaining walls, bulkheads, wharfs, docks, piers 7) Glass breakage (as long as not vacant for 60 days) 8) Accidental discharge (doesn't cover repeated seepage, vacant 60 days) 9) Falling objects (excludes: antennas(and wiring), masts, towers, outdoor equipment, awning, and fences, damage to falling object) 10) freezing (reasonable care must be used to make sure heat maintained, water drained) 11) Electrical damage (artificially generated (except: tubes, transistors, similar electrical components) 12) Collapse caused by (Perils insured agains, hidden decay, hidden vermin/insect, weight of contents, weight of rain, defective materials when building. DOES NOT INCLUDE settling, cracking, shrinking, bulging, expansion of a building. Items not covered: awnings, patios/pools, pipes, flues, drains, septic, foundations, retaining wlals, docks 13) Tearing apart, cracking, burning, or bulging

Question 30

Which perils are covered under a DP-3 (special) form?

Answer 30

Open perils for real property (dwelling) except the exclusions Named Perils for contents (Same perils as DP-2)

Question 31

What is excluded under open perils on a DP-3?

Answer 31

1. Losses excluded by General exclusions 2. Gradual and expected losses (wear & tear, inherent vice, smog, breakdown) 3. Settling, cracking, shrinking, bulging, expansion of pavement, patios, foundations, walls, floors, roods, or ceilings 4. Loss caused by birds vermin, rodents, insects, or domestic animals 5. Wind, hail, ice, snow or sleet damage to antennas, lawns, plants, shrubs, trees. 6. Freezing, thawing or damage caused by the weight of ice, snow or sleet to awnings, fences, pavements, patios, pools, foundations, retaining walls, bulkheads, piers, wharfs, and docks 7. Theft of property not actually part of the dwelling nor to dwelling under construction 8. V&MM, burgluryy damage and glass breakage if vacant for 60 days. 9. Any loss involving collapse, except than as provided under "other coverages"; 10. Discharge, dispersal, seepage, migration, release or escape of pollutants, meaning any solid, liquid, gaseous or thermal irritant or contaminant including, smoke, vapor, fumes, acides, alkalis, chemicals and waste

Question 32

How are losses valued on a DP-1?

Answer 32

All losses, property, contents are ACV

Question 33

Which DP forms include part E?

Answer 33

DP-2 & DP-3 (can add to 1)

Question 34

Which additional coverages does the DP-2 offer?

Answer 34

DP-1 coverage (with property removed covered for 30 days) plus 1) trees, shrubs, plants (5% of A / $500 per item / only covered by VVFLARE (vandalism, vehicles not owned by Insured, fire, lightning, aircraft, riot, explosion NOT windstorm / this part provides additional insurance)

Question 35

What types of losses are not covered by a DP-1?

Answer 35

``` Any cause of loss other than fire, lightning, v&mm, and extended coverages (if purchased) including: earth movement power failure off premises neglect water damage (flood, swer or drain backup, sump pump overflow) -war/nuclear hazards -theft -intentional destruction -damage from bursting pipes -ordinance/law -latent defect -rust -inherent vice -wear & tear -dry rot -infestations -animal damage ```

Question 36

What type of property isn't covered under a DP-1?

Answer 36

- motor vehicles (except those used to maintain property) - aircraft - watercraft (except for canoes and rowboats) - animals, birds, fish - money - tress, shrubs, plants - fence - patio - swimming pool - pavement damage from weight of ice, snow or sleet

Question 37

What are the differences between DP-1 and DP-2?

Answer 37

DP-2 provides replacement cost coverage and makes Coverage E (Additional Living Expenses) available. The perils covered by DP-2 are broad form perils.Coverage for property removed is increased to 30 days.

Question 38

What is coverage E and what does it cover?

Answer 38

Additional living expenses (loss of use). Indemnifies for the expenses incurred in excess of regular living expenses if the dwelling is unfit or untenantable.

Question 39

How is the limit of coverage E determined?

Answer 39

Can select a limit up to 20% of coverage A.

Question 40

How many days is property removed covered for under each DP form?

Answer 40

1: 5 days 2: 30 days 3: 30 days

Question 41

What type of property is covered by the DP-2 form?

Answer 41

All property covered by DP-1 plus: 1) Trees, shrubs, plants: 5% of Part A / $500 per item / only covered by VVFLARE (vandalism, vehicles (not owned), fire, lightning, aircraft, riot, explosion 2) Collapse due to a covered peril; hidden decay; hidden insect/vermin damage; weight of contents, equipment, animals or people; weight of rain collecting on roof; use of defective material or construction methods, or if collapses during construction 3) Glass or safety glazing material (except when vacant 60 consecutive days) 4) Ordinance or law (increased cost due to enforcement of ordinance that requires construction, demolition or repair of damaged part of building; demo or reconstruction of undamaged part of building; remodeling, removal, replacement of undamaged part of covered building (10% of A ) doesn't cover: 1) loss in value due to ordinance 2) dealing with pollutants

Question 42

What is not included in the definition of collapse?

Answer 42

Settling, cracking, shrinking, bulging, or expansion of a structure.

Question 43

John moved out of his home and he is trying to find a tenant to rent his old home. His old home has been vacant for 30 days. A branch fell off a tree and broke an expensive piece of glass. Would it be covered?

Answer 43

Yes, because glass is covered for up to 60 days when a dwelling is vacant.

Question 44

What basis does the DP-2 value covered losses with?

Answer 44

Replacement cost with insurance to value clause.

Question 45

Which perils are covered under a DP-2?

Answer 45

All perils in DP-1 (fire, lightning, internal explosion, ec, v&mm) Definition of vehicle damage is broadened (covg added for damage to any structure, including a fence Covers damage from rain, sleet, snow, sand, dust ONLY IF force of wind or hail damages the building causing an opening in a roof or wall. Weight of ice, snow, sleet (except fences, awnings, retaining walls, pools, patios, foundations) Damage from burglars (but not theft and cannot be vacant for 60 days) Falling objects (interior only covered if exterior damage is done to a structure) AND object not covered. Not covered: antennas, fences, awnings, outdoor equipment) Accidental discharge or overflow (burst pipes) of water or steam from sprinkle system, heat, a/c, appliance. Damage to pipe not covered nor is repeated leakage Tearing, cracking, bulging, burning of steam or hot water heating, ac, sprinkler Freezing pipes if precautions taken Loss from artificial electrical current surge Volcanic eruption or action and earthquakes

Question 46

Which types are perils are covered under each part of a DP-3?

Answer 46

A & B: open perils / all risk (anything but excluded) C: Broad form Broadens definition of motor vehicle damage to include damage for driveways, sidewalks caused by a vehicle.

Question 47

Compare the DP-3 to DP-2

Answer 47

Identical except DP-3 is all risk for structures and damage by a vehicle to a sidewalk is covered.

Question 48

This clause state that if there is a Los to a pair, the insurer can 1) repair or replace part to restore pair to preloss value 2) pay difference between ACV before and after loss

Answer 48

Pair and set clause.

Question 49

This clause states that if someone has another policy for a property each insurer pays proportionate share.

Answer 49

Other insurance.

Question 50

What happens to a policy if you die?

Answer 50

The policy continues for a legal representative, temporary custodian, or other person.

Question 51

What does the assignment clause do?

Answer 51

The policy or interests cannot be transferred to another party without consent of the insurer.

Question 52

This clause states that if an insurer adopts new policy forms during the policy term which broaden coverage without an extra premium, the changes are automatically made part of the pool.

Answer 52

Liberalization clause.

Question 53

This provision or condition places upon the insurer states that the insured cannot abandon the property to the insurer following a loss. The insured must cooperate during the settlement process.

Answer 53

Abandonment clause.

Question 54

Suits against the insurer: No legal action can be brought against the insurer unless there has been ____ ____________ by an insured with all the terms and conditions of the policy and the legal action commences within ____ years of the date of loss.

Answer 54

Full compliance / 2

Question 55

What types of perils are excluded on a DP-3?

Answer 55

Ordinance and law, hazards, wear and tear, sump overflow, power failure, neglect, war, nuclear, intentional destruction,

Question 56

What types of property are excluded on a DP-3?

Answer 56

Bills, currency, accounts, cash, money, coins, deeds, debt evidence, animals, birds, fish, manuscripts, passports, tickets, stamps, motor vehicles, aircraft, watercraft, (except rowboats/canoes), some electronic data.

Question 57

Can theft coverage be added to provide coverage for on or off premises theft?

Answer 57

Yes. Minimum limit is $1k.

Question 58

What was marine insurance developed to provide coverage for?

Answer 58

Good or products being transported or carried from place to place.

Question 59

Which classes of property does the nationwide definition of marine insurance recognize?

Answer 59

1. Imports 2. Exports 3. Domestic shipments 4. Instrumentalities of transportation and communication (bridges, tunnels, pipelines, power lines, radio/tv equipment) 5. Personal property risk floaters (inland marine)

Question 60

This type of policy covers certain classes of property on a schedule basis. It provides coverage on a all-risk basis (includes mysterious disappearance for 9 classes of property). Losses are settled on ACV. Worldwide coverage (except for fine arts which are covered in USA and Canada.

Answer 60

Personal articles floatet

Question 61

Which nine types of property are covered for mysterious disappearance under a paf?

Answer 61

1) jewelry 2) fur 3) cameras 4) golf equipment 5) fine arts 6) stamps 7) coins 8) musical instruments 9) silverware

Question 62

Would my boston whaler be covered under a paf?

Answer 62

No inboard and outboard coats aren't covered.

Question 63

What type of property can be covered with state amount on a paf?

Answer 63

Paintings, sculptures

Question 64

Mike buys the Mona Lisa for $1,000 and tells the insurer 120 days after purchasing it, which is the day after it was stolen. How much is paid, assuming a $250 deductible?

Answer 64

$0. Coverage applied to newly acquired art only if told about it within 90 days. (And only if he already has art)

Question 65

What is a personal effects floater for?

Answer 65

Travelers

Question 66

What is a personal property floater?

Answer 66

Coverage C for someone without a residence. Property is not scheduled.

Question 67

This package policy provides property insurance for an insured's boat and liability protection. It is used for small personal craft Losses; ACV. Covers liability for recreational activities such as waterskiing, parasailing, hang gliding by endorsement. Covers hull and unattached gear for boat:engine maintenance. Stuff covered by HO policy is excluded. Exclusions: intentional, liability assed under contract, business use.

Answer 67

Boatowners policy.

Question 68

A policy that provides package policy protection got larger pleasure boats, sailboats with an inboard or auxiliary power, and other forms of in inboard boats. Property covers: nav equipment, fittings, and other equipment necessary for operation.

Answer 68

Yacht policy.

Question 69

What are two limitations that apply to yacht policies?

Answer 69

Navigational area, distance limitation ( coastal areas - miles from coast)

Question 70

What is not covered under earthquake coverage ?

Answer 70

Flood/tidal waves, damage to land

Question 71

How is an earthquake deductive set?

Answer 71

Percentage of coverage limit, not less than $250. (Applied separately to real and property losses)

Question 72

What is an occurrence under earthquake coverage?

Answer 72

72 hour period

Question 73

What are the coverages of a CPL policy?

Answer 73

1) personal liability (coverage E) 2) medical payment to others (Coverage F) 3) additional coverages (supplementary claim expense, first aid expenses, loss assessment , damage to the property of others. )

Question 74

What is the basic personal liability limit on a CPL policy?

Answer 74

$100k

Question 75

When is injury or property damaged covered while an insured is using a golf cart?

Answer 75

When on the remises or if in a game of golf on a golf course, if transporting a handicapped insured, or used in a gated community where they allow golf carts.

Question 76

Is BI and PD covered when a ATV, snowmobile or moped is being used on premises?

Answer 76

Yes.

Question 77

Where is an insured covered for medical payments to others?

Answer 77

On premises, away from premises if injury is not business related.

Question 78

Does medical payments to others apply to injuries sustained to insured, family members, and other residents?

Answer 78

No, except it does apply to domestic servants.

Question 79

What is the basic medical payments coverage limit?

Answer 79

$1000

Question 80

What is the statute of limitations for med pay coverage?

Answer 80

3 years

Question 81

Does medical payments coverage cover counseling services, psychological testing?

Answer 81

No.

Question 82

What is the pd limit on a CPL policy?

Answer 82

$1k

Question 83

Who is an insure on a CPL policy?

Answer 83

Named insured Family or relatives living in household Children even if at school People under 21 who is in care of the insurer People temporarily possessing insured's animal or watercraft Student in school full time who was resident before moving out . Must be under 24 and your relative OR 21 and in the care of another insured.

Question 84

What is an insured location?

Answer 84

1) residence 2) vacant land other than farm land by insured 3) cemetery plots 4) premises acquired during policy if not for business. 5) other place insured is temporarily residing. 6) premises insured is renting not used for business. (Hall rented for wedding)

Question 85

What is excluded on CPL?

Answer 85

1) property owned by insured 2) contractual Liability 3) med expense covered by workers comp 4) BI to insured 5) BI or PD due to business activities 6) BI from war 7) BI or PD from auto, aircraft, hovercraft 8) any property owned by or rented to an insured or rented to others by an insurer. 9) expected or intended injury (reasonable force is covered) 10) transmittable disease 11) injuries by sexual molestation or corporal punishment 12) injuries arising from selling, delivering, possessing controlled substance.

Question 86

What business use is ok under CPL ?

Answer 86

1) Under $2k in a year 2) volunteer 3) watching kids without being compensated other than expenses 4) home day care to a relative

Question 87

When does watercraft coverage apply under a CPL?

Answer 87

1) inboard outboard under 50 hp RENTED to an insured. 2) sailboats under 26 feet 3) owned outboard boats under 25 4) any boat (owned or unowned) while laid-up. The book says any type of watercraft (regardless of size) borrowed is covered under CPL